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Dusk can feel like an apocalyptic time of day to arrive in Nigeria. Flying over the Niger Delta region from the East and descending towards Lagos, plumes of haze from constant oil fires rise into the sky. Nigeria is not for the faint-hearted.

The most populous country in Africa, with its largest city Lagos, Nigeria invites comparisons to over-crowded India. Almost two years into the Arab Spring, many also speculate whether Nigeria will be sub-Saharan Africa's Egypt, ground zero for a revolution not against autocracy but a force almost as oppressive: unfathomable corruption. The reality is somewhere in between. Nigeria stumbles along, but towards what?

What the many nations of Africa, the Arab world, and South Asia have in common today is that after decades of rampant population growth, several generations of misrule by what George Ayittey famously called the "Hippo Generation," and facing infrastructure on the verge of collapse, they are undergoing a transition into a post-post-colonial era.

Over half the world's countries created by the dismantling of European empires after World War II now have to learn to stand on their own feet. Their governments have to build infrastructure, create jobs for the world's youngest populations, and manage profound inequality and ethnic diversity -- or else they will become ungovernable.

There are dozens of elections under way across Africa this year and next, and from Senegal to Uganda, mass protests have broken out over the past year. Still, the continent is too diffuse and diverse for any kind of domino-like Arab Spring. Having arrived on the eve of Nigeria's 52nd Independence Day celebration, I witnessed throngs of citizens proud to celebrate their national freedom and democracy, and debate their future with openness and honesty.

What they are celebrating, however, is at best a federation, and certainly not a nation. Nigeria contains at least 300 ethnic groups, with the largest being the Yoruba (southwest), Hausa (north), and Igbo (southeast). While the 1960s witnessed the genocidal Biafran War in which the Igbo attempted to secede, today's violence is much more centered on the Muslim insurgency in the country's north. The conspiracy theories surrounding the rise of the Boko Haram terrorist group range from claims that it was set-up by the military to justify a bloated security budget that already amounts to one-quarter of GDP to accusations that secessionist Muslim parliamentarians created it to destabilize the state.

Either way, the group has bombed dozens of churches and killed at least one thousand people this year alone. Meanwhile, the economy of the north has shrunk by a third since 2010, while paramilitary reprisals have undermined Abuja's legitimacy. With Islamist insurgencies already threatening in Mali and Niger, northern Nigeria seems likely to get worse before it gets better -- and the allegiance of half the country's 160 million population hangs in the balance.

Holding Nigeria together is just one major challenge for President Jonathan. His initial wave of popular support made him the Obama of Nigeria, but the lifting of fuel subsidies in January this year earned him widespread resentment manifested in massive protests against rising costs, high unemployment, and government graft.

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Goodluck's finance minister, noted former World Bank economist Dr. Ngozi Okonjo-Iweala, promises that proceeds from the subsidy cuts will be used for social programs, roads, railways, refineries, dams, irrigation, telephony and internet access. Certainly stable electricity would be a plus, since not even the most posh hotels and homes have it, relying instead on generators. There is no doubt that the Nigerian economy needs some "tough love" measures, but the $6 billion derived in cutting a subsidy that helped the poorest could easily have come from collecting taxes from those can afford to pay them, or curbing the corruption that has been responsible for the vanishing of over $300 billion in donor aid and half the country's oil revenue since 1980.

If Nigeria's oil wealth were better managed, the country would be the undisputed leader of Africa. There are signs of what can be done when oil revenues are spent well, from housing projects and airports in Akwa Ibom state (now wealthier than its neighbor River State, which is home to the pipeline bombing and oil worker kidnapping MEND insurgency) to the elevated light-rail now under construction and stretching from Lagos to neighboring Benin.

The railway -- as well as new roads, a fleet of new garbage trucks, and an efficient China-inspired bus rapid transit (BRT) system -- are among the signature projects of Lagos state governor Babatunde Fashola, who seems almost destined to take the national reigns from President Jonathan. Fashola has managed to impose and collect taxes, and deliver services in return -- a formula not achieved at scale anywhere else in the country.

As one Lagosian woman told me, "It's easy to be popular: just do something." About 60% of the city's budget is now spent on infrastructure projects, especially roads and bridges, the rapid bus system used by more than 200,000 people per day.

But even he has a long way to go in his city's cauldron of urbanization, inequality, and resource stress. The Lagos population has grown from 1.4 million in 1970 to perhaps 14 million today. It now ranks just behind Mumbai, which is similarly a creaking peninsula featuring extravagance and destitution, vibrancy and futility. (Both cities represent approximately one-third of the national GDP.) As has been learned time and again in Mumbai, cleaning up the streets and underpasses has to mean more than sweeping away its people.

The recent demolition of a section of Makoko, the "slum on stilts," was a classic populist move that has scored media points but achieved nothing. I floated through Makoko in a rickety canoe, navigating the fetid swamp through a network of tight canals. The slum is teeming with naked, filthy children, open sanitation, and trash strewn everywhere, especially semi-submerged in the water.

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Chinese generators provide intermittent power for lights, television, and blasting music through loudspeakers. Soot rises from grilling pits, saws churn as men cut logs to re-build their homes, and women hawk small plastic packets of soap and snacks. Makoko's residents have nowhere else to go, even though there is land available nearby on which large-scale public housing could be built for them and the estimated 3,000 villagers who wander into Lagos to settle each day. Makoko could then become a lucrative lumberyard from which timber could be sailed across the lagoon and sold around the country and region.

Elsewhere in Lagos, on the central Victoria Island district, teenage gangs control access to the public beach and harass passers-by on the boardwalk, yet private developers nonetheless want to build an ambitious and upscale "Eko Atlantic" complex on the narrow Lekki Peninsula at the same location. It's easy to imagine private security contractors shooing away anyone disturbing their clients' peace and quiet, but equally likely there will be a security breach and looting of such a flamboyant enclave.

Leaders in India and Nigeria often seem to wish their own people would just go away. But Nigeria's population might double to 300 million by 2030 (the size of the U.S. population today). And this despite the fact that in Nigeria, "Getting pregnant is the most dangerous thing a woman can do -- more deadly than HIV, car accidents, and malaria combined." So says Nyimbi Odero, a serial entrepreneur, former Google executive, and adviser to the Nigerian election commission who spearheaded the digitization of voter registration for over 75 percent of the country's population.

Odero is now turning his attention to the plight of women, 1 in 23 of whom die during childbirth (compared with 1/7,600 in the U.K.). Like Thailand, Nigeria is already rolling out free contraception programs and discouraging having more than four children. But Odero reminds that planning for pregnancy is as important as planning against it, so he is investing in lowering the cost of fetal heart monitors, ultrasounds and other medical devices to under $100 and spreading them around the country.

The government can do a lot more to open doors for such social entrepreneurs. The sheer number of new start-up venture capitalists, micro-credit operations, SME boosting private equity funds, and other "financial supermarkets" exploding in Nigeria is inspiring. One entrepreneur showed off his investments in a budding cocoa distributor and bottling company; another is ramping up the e-waste sector, rapidly dismantling and recycling parts from the thousands of tons of discarded computers, monitors, printers, and copy machines shipped from Europe and Asia to Nigeria. These are the stars of the Nigerian economy as much as the country's noted billionaires such as Aliko Dangote, the cement and sugar magnate worth more than $10 billion, and Tony Elumelu, a banking titan who is the latest darling of the Clinton Global Initiative.

The ranks of Africa's billionaires are growing, and fortunately many of them are giving back, creating thousands of jobs in export businesses and setting up vocational academies to train future managers of construction sites and factories. What they and the government need to do now is support the small-scale entrepreneurs who want to train legions of wood workers, home builders, machine-operators, and plumbers. Nigeria won't succeed unless they do.

Africa's move into a post-post-colonial phase is also a chance to shift towards a more postmodern form of governance. Governments alone will never solve social problems of such magnitude without the help of billionaires, social entrepreneurs, religious charities (Jonathan has just launched a "One Year Prayer" movement to bring the Church on board for his reforms), and of course, foreign multinational corporations.

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Shell has been operating in Nigeria since the 1960s, but briefly vacated its personnel during the 1993 coup that brought General Sani Abacha to power and witnessed the hanging of Ken Saro-Wiwa and other Ogoni activists. Since that time, Shell has convinced the government to spend more oil revenues in rehabilitating oil producing regions, even lending $3 billion to the Nigerian government in 2009, and committing over $100 million of its own profits to schools and health clinics in the Delta region.
But where Shell could have the most impact is simply in upgrading the very energy infrastructure it relies on: the leaky pipes that spill 11 million gallons of oil into the Delta each year, or the dilapidated refineries that force Nigeria to import 70 percent of its gasoline. Either way, mega-corporations like Shell are realizing that they are often as much a part of a state's governance as the government.

Everyone seems to have a one-word answer to the plight of African nations today: democracy, secession, micro-credit, literacy, vaccines, and more. But African states won't survive at all in their present form without one other basic physical investment: infrastructure. There may not be any widespread African Spring in the offing, but Nigeria and dozens of other African states could very easily continue to devolve into self-governed or ungoverned clusters even if they don't outright fail.

Colonial powers only haphazardly cobbled together African states; they didn't knit together cohesive societies. What will make the difference between celebrating independence and celebrating success is not just political nation-building, but physical state-building.

Parag Khanna

Parag Khanna is a leading global strategist, world traveler, and best-selling author. He is a Senior Research Fellow in the Centre on Asia and Globalisation at the Lee Kuan Yew School of Public Policy at the National University of Singapore, and Managing Partner of Hybrid Reality, a boutique geostrategic advisory firm. Read more.